New NFT Tax Guide Offers Valuable Advice — and Sartoshi Art Too
Tax season may still be months away, but it’s never too early to start thinking about it. And if you’ve made or lost any money in the NFT space this year, you may have some questions: How do you report your NFT earnings? Does your CPA even know about NFTs and how those taxes work?
Jacob Martin, an attorney who specializes in the NFT space, launched the NFT Tax Guide — as an NFT, naturally — on Tuesday, Oct. 26, at NFTTaxGuide.com to offer advice on just that, and more. (Note, the guide provides guidance, but you should still consult with your tax advisor on your tax returns.) At a price of .08 ETH (about $338), those who mint it will get access to the tax guide, the meme art by Sartoshi, as well as a subscription to ZenLedger for the 2021 tax year.
Martin tells nft now that this project started when he first helped the founder of an NFT startup figure out their complicated taxes by putting together a “bespoke team” of CPAs and tax attorneys. But, as Martin says, this wasn’t a sustainable, scalable solution for most people. “The whole market deserves help on this topic, not just a couple of people who have the time and have had success enough to go through this process,” he insists. “So I was like, ‘We need some sort of informational guide.'”
Martin says he had no interest in writing multiple blogs on taxes, so instead, he started building a team of top CPAs and attorneys to help. He reached out to lawyer Charles Kolstad, an expert who knows his way around crypto assets, blockchain technology and issues around initial coin offerings — or as Martin put it, “literally the authority on crypto tax.” His team, which also includes Andrew Gordon and Alex Roytenberg — both CPAs experienced with NFTs and crypto law — then put together the 30-page NFT Tax Guide, with Hannah Lorenz of a leading cryptocurrency law firm on board as editor to help make the guide easily digestible for non-tax experts.
“What can I do to take this to the next level and make an NFT play useful?” Martin says about the project’s evolution. “I was like, ‘You know what? … I want somebody to have it in their wallet and be happy to have it in their wallet. For me, that just meant it needed to be a meme.”
Enter Sartoshi. Martin reached out to the artist, whom he says whipped up the IRS meme (as seen above) to pair with the NFT Tax Guide in just minutes. “I’m like, ‘Oh my god, it’s perfect!'” recalls the attorney of the token art.
The JPEG by Sartoshi provides access to the token gated part of NFTTaxGuide.com, where the actual tax guide itself resides. From the site, where those who’ve minted the NFT have gained access to, there will be free access to a ZenLedger Executive Plan subscription, which can help users calculate tax liabilities and create reporting documents.
Martin says he talked to “all of the major tax software companies” before deciding to partner with ZenLedger. The decision to go with ZenLedger was pretty simple, according to the attorney: “They were the only one that mentioned the standards of NFTs, they knew the technological standards.”
But more than just providing guidance around NFTs and taxes, Martin also wants his drop to do some good, especially for those in the NFT community who may not have the resources to figure out their NFT-related tax issues. “How do I keep the good vibes all the way around?” he says. “I’m hoping to give away a huge chunk to artists.”
To do so, he’s setting aside 25% of the proceeds until they reach $2.5 million. At that point, he’s hoping to have another entity step in to double it to $5 million. Budgeting $2,500 per person for a full expert accounting, the attorney hopes to help about 2,000 artists with their taxes.
To reach that goal, of course, a lot of people will need to mint the NFT Tax Guide. “The hope is that this is the single most widespread bought NFT on ETH,” says Martin. “It wasn’t the goal at first, but at this point, it’s one of the goals. Pak sold 65,000 — let’s sell more! I want to help so many people!”
But he also wants the guide to actually help people who mint it. “I legitimately believe it’s the greatest possible tax guide for this space,” he tells nft now. “It’s from people who deeply understand it — it’s adjusted accordingly. You’re going to read it and be like, ‘Oh! That makes sense!'”
The NFT Tax Guide is available to mint now through April 18, 2022, at NFTTaxGuide.com.
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Photo courtesy of @sartoshi_nft.